South Korean stocks closed 0.71 percent lower Wednesday, as investors' sentiment was dented by weak economic growth outlooks from home and abroad, analysts said. The local currency fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) shed 14.4 points to finish at 2,017.24. Trading volume was moderate at 329.3 million shares worth 4.36 trillion won (US$4.13 billion) with losers outnumbering gainers 416 to 385.

Analysts said Seoul shares lost ground as investors' sentiment was dented by the country's weaker-than-expected growth outlook for 2014 amid the lack of growth momentum.

The Organization for Economic Cooperation and Development said South Korea's gross domestic product (GDP), the broadest measure of economic performance, is expected to post a 3.8 percent growth for 2014.

It marked a 0.2 percentage point drop from the 4 percent on-year growth outlook suggested earlier this year.

The Paris-based organization said South Korea's heavy dependency on exports, which account for more than half of its annual GDP, may emerge as a drag on its growth depending on conditions of the global economy and foreign exchange markets.

“The bearish foreign stock markets, sparked by the gloomy outlook over the global economy, weighed down on the local stock market," said Lim Soo-kyun, a researcher at Samsung Securities Co.

Foreigners offloaded a net 143.8 billion won worth of local equities, with institutions buying a net 87.8 billion won. Retail investors bought a net 53.8 billion won on profit-taking.

LIG Insurance Co. rose 2.79 percent to reach 31,300 won on reports that its holding company will sell all shares in the insurer.

South Korea's LIG Group said Tuesday it plans to sell all of its shares in its nonlife insurance arm in a bid to secure cash to compensate investors for losses incurred from its 2011 financial fraud scandal.

The conglomerate said it will sell its 20.96 percent stake, or 12.5 million shares, in LIG Insurance Co., while the acquirer has yet to be decided.

Tech shares traded lower, with Samsung Electronics falling 1.28 percent to 1,470,000 won and SK hynix losing 2.84 percent to 32,500 won. Samsung Electro-Mechanics, an industrial parts maker, shed 0.52 percent to 76,800 won.

Carmakers also traded bearish, with No. 1 player Hyundai Motor decreasing 1.55 percent to 254,500 won and its smaller affiliate Kia Motors edging down 1.59 percent to 61,700 won. Auto-parts maker Hyundai Mobis shed 1.46 percent to 303,000 won.

Brokerage houses, meanwhile, traded higher, with KDB Daewoo Securities adding 0.11 percent to 8,930 won and Woori Investment & Securities moving up 1.49 percent to reach 10,200 won.

The local currency ended at 1,057.90 won against the greenback, down 1.50 won from Tuesday's close, dealers said. (Yonhap News)